tv Power Lunch CNBC January 15, 2013 1:00pm-2:00pm EST
. all right. let's do final trades. the good doctor is first. >> morgan stanley. buying those january calls that expire friday. >> murph. >> i think you can look at target here. also the homebuilders have been great with lennar's earnings. we bought more lennar today. >> joey. >> i like the move in deckers outo outoutdoors. >> weiss. >> doc must be buying at a very big position if he put his money where his mouth is. >> ooh, weiss, look at that. >> i'm shortening thee ining ye
against the dollar. >> facebook. obviously waiting for the announcement in a matter of moments. we'lls to it to power lunch. what will they unveil. that begins now. >> we have, scott, actually two major breaking stories right now. facebook about to make the aforementioned major announcement. we're inside the headquarters. that's screen left for you. screen right, ahman javers on the president's gun control plan. >> a few moments ago james carney told those in the meeting room the president and vice president will hold their event tomorrow. carney saying that the president and the vice president will be joined by children from across the country who wrote letters in the wake of the shootings at sandy hook. carney also saying he's not going to reveal details at this point over what's going to be in that legislation. so we'll have to wait and see
what this package ask going to contain but it contains legislation that would need to be passed on capitol hill. >> amon with the announcement. let's go across the country to facebook at menlo park. they've been drumming it up, and we're waiting and watching and waiting and watching and julia boorstin is inside facebook headquarters and scott wapner will be in the newsroom poring over the details. stock up 16% in the past three months. of course, it wasn't always that way. since the ipo last may, facebook shares are still down 17%. welcome, sue. good to see you. >> good to see you, too. and with us for the rest of the hour to break it all down is david kirkpatrick. he's the author of the book "the facebook effect."
david, do you think they have to do something quite significant and as i understand you think it might have to do with mobile. tell me. >> i think it could be one of several things. every thing they're doing has to do with mow bowl but there's another area that could be involved which is search. search is pretty crummy on facebook. i would be watching for something to do with mobile or search and beyond that it's pretty hard to say at this point because they're keeping pretty tight-lipped. >> a lot of people believe it's going to be a phone. you disagree. >> first of all, they're not committed to building a phone. they're so committed to their platform. they're going to continue with the way it works on ios and
apple is and everybody's blackberry. it is possible down the road that they might improve the way software works on mobile devices in the developing world which is where their biggest market growth is right now. >> we'll get back to you in a few minutes. todd, back to you. >> fantastic. wall street compensation in the spotlight. let's look at morgan stanley shares up a quarter. mary thompson here with the fallout. what's going on, mary? >> well, this is going to impact morgan stanley's top earners. all employees both cash and stock will be deferred. if their total compensation is more than $350,000 and the portion of that boy news pay exceeds 50,000 dollar. the exception the managers who work for the brokerage been.
business. it has nothing do with the sentiments presented by the hedge fund. while it expressed confidence in management it said it was concerned about pay levels. another 25% in 2014 and the last part in december of 2015. but the equity portion, the remaining 50% in 2015. overall wall street bonuses seen up modestly this year, though increasingly mormon is going to be going to the far performers with the troops getting smaller payouts. >> that's right.
it depends if you're a top earning. the troop levels, rank and file is going see their pay cut somewhere. >> all right, mary. thank you very much. good to see you. all right. some conflicting reports on retail this hour. can commerce says retails did come in better than expected. up a half a percent versus an upwardly rising 0.4% in november. holiday sales were weaker than expected says the nrf. sales were up 3%. lowest gain since 2009. despite the conflict, retail stocks are up. leading the pack up 20% and raw stores up 2%. joseph a. bank up.
vf corps about about half a and williams sin williams sin know ma. >> the dow jones industrial africa is now on the downside but the transports is what everybody is watching because it's up. it is on course to close as a historic high which would pass its july 2011. we'll see if it can hold that. it's significant because everybody watches the transport. are you watching that, mr. pisani? >> let me show you the components. it's the airlines that have been
leading. they've been doing all sorts of things, they've been paying down debt, merging, limiting expansion. rail woods also strong today. homebuilders, lennar pointed to numbers that were good. 32% in increases in orders. that's a great. can they do 32% in retails. >> i time. that's helping some of the real as the as well. >> that's a 22% increase. >> that's hum. remember, they temnd to go downhill. they're all on the upside.
that's a little encouraging. >> back to you. >> mark zuckerberg, we should point out, has begun to speak at the facebook event in menlo park, california. the finger pointing has long since started in washington as the debt ceiling key bait speaks up. president obama issued this warning to house republicans during a news conference yesterday. take a listen. >> they will not collect a ransom in exchange for not crashing the american economy. the financial well being of the people is not eleven rafrmged to with used. it is not a bargaining chip. and they'd better choose quickly because time is running short. >> representative lynn jenkins is a republican from kansas. she is also the house republican vice chair.
i guess basically i should ask you to respond to the president. >> well, i wish the president would stop campaigns and come over to the hill and have a conversation with us. republicans are willing to work with this situation which is our out of control wasest watt errand spending. >> you'd like to have him -- he sayed yesterday he has a nice pick imevery year. he said this in the wall street toufrpd. it's wrong to think of it as ooh long stamp. those days are onner. that debt limbet is one of the
last steps toing tagt tachlkts there are a lot of americans who would 'fwree with that analysis. >> senatorial obama afwleeed with those comments. claiming it was a lack of leadership. i think that is true today. and you have to review how we find ourselves in this situation today. the senate hasn't passed a buchlkt in close to four years. the president sends budges up to capitol hill. the last couple of years they got zero votes. zero votes because they never get to balance. house republicans the with ones that get us to balance. we ned need a direction to go. we need so scott to putz ow on that path. >> one. would what would it take for you to vote to invisa the debt
crilling. >> we have to tang the blank chegs away from washington and demonstrate to the american people that we can prepare our finances the way they do around a kitchen table. they prepare a bunt and don't take more money than they their i lawed to take in. . hoom -- gou it would render support to people who are victims of hurricane sandy. the prior version you opposed. the current verse ll you vote for it? fooet not erms why not. >> the first bell i voted on bus a flood snurnsz program. that was bankrupt. i live in the state of kansas
where it could be flood. that's why we worked really hard to pass programs to save it. up fortunately they were opposed. that was the reason for that. >> i'm sorry. we're following this breaking news out of facebike time. sorry to inrupp occipital. >> let's go to scat wafrter on facebo facebook. the holdlines moving from o'to noon, gran, what allegedly allows you to share contact wlg you.
you can see facebook shares are down on this news and you have to know that with the anticipation on this, who is ooh inside, right now mr. zukserburg is making these remarks. does this measure the 60 hrd yard gush? >> indeed, scott. and we're going to ask that very question to our guest david kirkpatrick. what do you make of the announce and issed servet if you thifrp of facebook as a giant reoppose torrey of information and to now u we've face lick had the nighsly feed or you d get information about it on their time bun they want wanted thend.
search has been crummy on fast bike, considering the vast amount of information they have that, thanlt to source and delight it with all diepd of contact ters is what they've gone going. >> he cede what distinguishes from regular search is filter. you think that's a sigs can't move. >> major. it could be a big deal. . very overdue and important. >> and the stock is moving on those comments from mr. drugs and it's turned into the green by 22 centis. meanwhile it'll be a sfootd rof small caps.
plus, it ooh it's a lieu lu of lae ochbd when pewer lunch returns. [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro.
what he calls knowledge graph search. the reason why we're showing you google shares is you can see the obvious spike higher in shares of google, up more than 1%. why would this be happening? it's social search. perhaps it's a britd of a relief rally today. it's fallen behind google. not moving tremendously. a little bit volatile, but nonetheless on the move. let me point out shares of google trading a tremendous amount of vacuum. it just blew through its ten-day average vacuum of 78.5 million shares. worth keeping in mind, the strong has trade up 60%. much more to come throughout "power lunch." sue, i'll send it back to you. >> all right. scott. as a matter of fact, david's sitting right next to me and he says, we've got to talk about
this. to scott's point this is a different type of search. do you buy it or not? >> i think google is great company but i don't think you should get excited from anything we've heard so from on facebook. facebook has such a macive amount of useful information that they have never made easily available to people in this kind of a way. also you've got to wonder how it affects facebook's partnership with microsoft. >> with we put that up? we see google still holding on to about a 10% gain. david is going to be my co-pilot for the hour. meantime should investors think
small in order to reap big returns. ? the answer might be yes. chris rets ler is bullish on what he calls small tap trail blazers right now. good to see you. welcome to "power lunch." >> thank you for having me. >> chris, what are your benchmarks in terms of investing in a stock. what sectors of tech do you like right now in small cap? we've been focusing on the addition of ipads into the system need to be onboarded onto campuses and other networks. one way is to do it quickly through wireless technology. we also are focused a lot on the recovery and enterprise hard disk drive space which after the floods in thailand last year caused a lot of disruptions in
2012. that would help a company like super microcomputers. one think they're going to need a lot more of is processing. >> that's a good place to leave it. scott wapner, back to you. >> i figured i'd give you some color on exactly what this whole thing is going to look like. zuckerberg saying in their early development of graph search, so presumably there's a lot more to come, it's only available in english today and you can onto search for a subset of context of facebook or other open apps. here's how it's going to look. it says graph search is going to appear as a search bar at the top of each page.
here's how it may work. "my friends in new york who like jay-z." and then to get that set of people, places and photos on facebook, you get those only from your users. he goes out of his way to say it's not web search. again, you only search subjects that have been sharet with you. the stocks are down 3/4 of 1%. a lot more to come. >> so it's a search of a closed loop basically, right? >> exactly. the best example is if you're lair one of them, it turns out
it's a closed social search only. it's not open web search which would be a direct attack at the business that google makes its living at. it's perhaps why facebook is moving a lis lower. >> if this the is successful they won't then go to open web sefrp, correct. >> the real question is hoult matly how does facebook monetize oh peel. is this the first step to adequately doing that if woe know oumt of 1 billion users, yu that zsh how can facebook mon tees that to take its missile to the very ending. >> let me throw it out there
real quick. mel said on cbbc i'm not sure you can. that's going to be the key question for facebook. >> would you agree, kevin. >> it's to keep them on facebook. th >> what this sing go to do is keep people on face boobook lon. it's designed to work better on your mobile than your rng. >> does it worry you that it's in development? >> actually these kinds of things take a few users. it's not going to have a near term effect on revenue i don't see anything different. >> hey, guys. sue if i could just eninterweb.
you see they even suv erped as a sindh can't drop. >> this is about you, right? a restaurant, a bhaur, something like that. maybe they give you the information ran than goir to a jell p sfwloo say you go to the server. you're going to be able to do things like where d suffers in la gu bach go to coffee. even in even on a service liej y yep. >> they go to a wonderful little place off the pacific hie coast highway. >> at night they go to place called the blue roon. they have a great band. ite wu68. we're going to take a quick
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all right. welcome back to "power lunch." continuing to follow the facebook story. want to show you some video just leased here. these are the first pictures coming out of mark zuckerberg making the big reveal at facebook headquarters. we understand he's since left the stage. with don't know if it's going to be a one more thing moment when
we grew accustomed to with steve jobs. but mr. zuckerberg has left the stage with what he calls graft search, only available in english today. much more work to be done on that. we've seen facebook sell off in the wake of the news. it's interesting in the context of the conversation youer having sue gives moto the very well respected text blog. they have a headline out that says facebook just declared war on google. meet your new search engine. that's how at least that influential blog is spinning the story and it plays to what david was mentioned. >> yeah. you keep stressing this could be good for microsoft as well. why? you were explaining there was a default. >> microsoft has been a source
of it. they have a very close partnership which continues to improve, by the way. so, you know, they haven't described all the details of how this is going to work, but if you're going to go to the search box on facebook looking for what your friends like in laguna beach or what surfers like and you don't get what you're looking for, you're going to want to go to the web, but you're already going to be affected to bing default traffic on facebook is bing. those who want to go to the web is going to build traffic for bing. that is good for microsoft and probably a negative for google h. >> that's why we see microsoft stock up perhaps a third of a percent. you know, you have been very enthusiastic about this. yelp is now down 5.3%. are there ore companies that you think are going to get hurt by this particular announcement? >> some of them are not public, but foursquare is a company
that's built itself on this kind of recommendation and if facebook gets this right, it could be bad for a number of private internet companies like foursqua foursquare. >> i think foursquare will do well in the long run, but, you know, it's something i can tell you in their office right now they're like really wondering. >> fascinating. >> scott, do you want to comment? >> i apologize. i didn't realize my mike row phone was open. this puts the instagram a little more into perspective. facebook does say today that the first version of graph search focuses on four air yas. that being people, photos, places, and interest. >> absolutely.
very good point. >> great to have david here as well as he's one of the resident persons on facebook as well. let's go to rick chantellely. >> if we look at it, what we're really after, there's been a lot of talk about a big selloff in treasuries. hovering right now at two-week-low yields. if it's 181.5 or lower, that would be the case. if we look overseas, we can see a lot of things from some of our neighbors. again, we share something. we all have programs to basically liquefy and we all buy programs. it plays havoc with our currencies. it tends to push down our interest rate. no different. whether you look at the boons or look at this one-week chart of jgbs, their yields are lower, their patterns are similar. >> thank you very much.
sharon is tracking it over at the nigh next. >> we're up about 14. the big games have been in the platinum market. a number of mines shutting production. about a fifth of anglo-american's in that area are going to be shut down and that is something that is definitely helping platinum outperform gold, first time in ten months that's happened. back to you. >> sharon, thank you. so where's the smart money on wall street investing? we're going to tell you up next. and america's failing infrastructure. imagine a future of broken bridges and roads at not enough money to fix them. a report on the u.s. economy when we come back. ♪ [ male announcer ] this is karen and jeremiah.
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shared with you. now let's hear from the man himself. >> we believe that we're giving the people the tools to map out this graph, then that map that people build can be the basis for building a lot of different kinds of services for connecting. >> not great quality of audio obviously but facebook was a bit restricted when it came to media access to this event. you can see the stock has been on the move. volume has been much higher than it normally is. other stocks are on the move as well. let's take a look at google. again, this is social search. this is not what you would consider to be open web search. google's bread and butter. that's why they have largely been in the green, although off the best levels as you can see here. i want to take a look as well at other stocks moving. yelp is certainly one of them. a company that does a lot of
localized searches if you will. it's down about 7% and that looks to my eye to be the low levels of the day for yelp. you have to consider shares of linkedin. having to deal with professional services, job searches and the like. as you can see from that pretty graphic there, it has recovered all of its worst levels of the day. again, we continue to follow the story. graph search. two terms you'd better get familiar with. >> let's go to nasdaq where see seema has more. >> continues to move lower. it's the worst performing stock on the nasdaq 100, tyler, not just for today but for the year. 2013. a strategic analyst tells me that 440 stands out as the next
key long-term support level. it's about a 50-point move from where we're moving now. lastly, the big winner here, dell continues to move higher on speculation that the company is looking to go quiet. the stock up by almost 5%. back over to you. >> thank you very much, seema. let's turn to the hedge funds. they're taking more risk with reportedly higher levels. will a looming debt rate derail us? joining us first with the top hedge funds strategies is david. good to see you, david. we're a little short on time because of the facebook event. forgive me if i have to interrupt you for breaking news but i would assume that the addition of more leverage to portfolios is a good sign. >> that's right. in general not so much the use of leverage but you're seeing the participation rates in the market go up.
hedge funds are taking more net long positions and you're seeing an overall risk fund. >> are there places they're putting their money more than others? >> you're seeing a lot more. in terms of the stock pickers you're looking at consumers and emerging markets for equities. >> also the dividend area has been very popular, but not necessarily in terms of the highest yielding of the dividend stocks. why? >> that's right. if you take a look what citi private bank is doing right now, we're looking for dividend equity but we're looking for the underlying fundamentals of the companies. balance sheets are improving, cash flows are improving and their dividend yields are going to improve and we think that combination given how high they are relative to treasuries gives
an enormous opportunity in that space still. >> david, thank you very much. >> good to see you, sue, thanks very much. >> tyler? >> the end of a long and windy road and a bumpy one. lance armstrong confessing to using performance enhancing drugs. what are the legal ramifications for him? we'll be back. [ female announcer ] today, jason is here
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>> hi. for years and years and years wheel he was an active cyclist he denied doping. he denied it in any number of interviews, he denied it in a deposition in 2005, and now i'm told by people close to the situation that he will admit to oprah winfrey in that interview that was taped yesterday that he did use performance-enhancing drugs to win those seven tour de france titles. you know, the taped interview was part of what i have called lapse armstrong's he didn't counsel out and admit it. heal boy jazzed for the stress he had caused them. it was a very emotional meeting.
armstrong got choked up. several people there cried and he left there and went on to the oprah winfrey interview and it lasted 2 1/2 hours and today winfrey says she has so much material she's going to air it over two nights. she described the interview as difficult. she said that armstrong did not come clean in the way that she expect and she did admit that he got emotional at times. she said she and her staff were mesmerized at times by some of his answers, so it will be very interesting to see exactly what he says about drug use during that interview. tyler? >> all right. thank you very much. so armstrong admits sort of apparently, maybe, to doping, so what are the legal ramifications for him? our senior correspondent scott cohn has that story. >> he's opening a big can of legal worms. one year ago, remember, the u.s.
attorney in los angeles announced he was closing a criminal investigation. meantime cnbc has learned that according to newly unsealed court documents that armstrong has now complied with this subpoena which he was fighting with the u.s. postal service. the subpoena demands all of his medical records. there's plenty more on his docket. the justice department could now join as a civil plaintiff. the sunday times in london now says it is suing him for $1.5 million. and sba promotions is said to be looking to collect $7.5 million that it paid out to armstrong in an arbitration where he flat out denied it. his attorney said he went in with a lot of legal advice.
>> he did it because everybody else was doing it. he wanted to keep up. he wanted to become a champion lawyer. he has a lot of settlement talks ahead and maybe some more lawsuits from all those sponsors who believed lance armstrong's story. sue? >> what do we know about his personal wealth? can he afford this? he was so successful for so many years and made an enormous amount of money on the surface anyway. >> he did. he got money in some of these claims, of course. he is a very wealthy man, but that wealth is going to be eaten into considerably by this. so the lawyers were talking with him before the oprah interview about how to contain the damage and a lot of lawyers probably advised him not to talk at all.
>> all right. i'm sure. thank you very much. all right. stay tuned. facebook is now on the downside. a lot of vacuum in the stock and a lot of volatility. we'll be back in a moment. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy.
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welcome back to "power lunch." just when you thought he wouldn't channel his inner steve jobs, he has. he's come back to the stage to say one more thing. facebook has a partnership with microsoft's bing. how interesting is that? we'll see what they're doing here. if nothing fits the querrey from the graph search, you can go to the web do a web search on bing, and that is microsoft's key their there. those shares are likely to beive between now and the next couple of hours. even in the after-hours session after investors continue to die jefts the story today, which is as follows. mark zuckerberg announcing his graph search. it allows you to search for
things like photos, people, places or interest. it is prohibited -- it's only going to be used for people who have shared things with you, not making it a traditional open search as we've become so accustomed to. some examples of what you might search for is people who love tennis and live nearby. you get the point. that brings the instagram purchase right into focus, i should say. take a lack what the stocks are doing now because facebook has traded more than 100 million shares. that's 20 million shares. also traded within less than ten-minutes time. it gives you the idea of the type of volume there. google shares were up on the news, because, again, this was social search. google now has turned negative. another stock on the move to the downside is yep. that was one that was selling off rather sharply here.
again, this has a localized version to the nature of the search. take a look at linkedin. many are moving in dreirect relationship to the announcement made by mark zuckerberg in california. they open match.com. tyler, aisle send it back to you. it's going to be a story that certainly is parse for the rest of the day and days to come as wall street tries to decide if this is the thing that's going to take facebook to the next level. is it going to be the thing that keeps your eyes on facebook longer? maybe you'll look at an ad if you're staying on there also and also your mobile device whether you're using that, whether they'll be able to monetize that and keep this story moving forward. >> thank you so much for taking us through all of this
skillfully and artfully. it makes you go yelp on some of them the way the lines were reacting to this facebook news. he rejoins us, the author of "the facebook effect" writer. david, you indicated in one of your prior remarks that what you expected here was if the local search, the graph search, didn't lead you where you wanted to, go it with us going to take you via bing to a more global webwide search and that's exactly what zuckerberg said. i guess my question for you is you seem quite enthused by this. you see the potential here. why isn't the stock seeing the same potential that you do or has it already priced that in in. >> well, the stock has been priced as an awfully high level since the ipo and even despite the fact that it's fallen, it's still a super high p.e. this is a company that's got to grow into its stock, whether it's 17 or 38. i think this does increase the
likelihood it will grow more rapidly into a higher stock price because this actually opens a third front in the facebook project really. they're basically saying news feed, timeline, and now search. they're basically elevating a whole part of the business in parity with the other two things. >> do you think this is similar to linkedin? elaborate on that. whenever facebook makes changes, privacy issues make people nervous. >> i've looked at it in the last hour. there has. been a lot of alarmist talk about privacy, but the fact that any time facebook does anything that makes information about people more accessible, it makes some people nervous. >> does this vindicate mark zuckerberg? >> i don't think he needed to be
vindicated. he is a great leader. i think what it does show is he can build big new features that can have major revenue implications, which this does. >> we're going to let you talk about dell in a couple of seconds. tyler, back to you. >> when we come back, we will talk about dell. we'll be right back. [ male announcer ] alka-seltzer plus presents the cold truth.
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